For Mubarak Saeed, a 40-year-old Yemeni father of seven, the past three years have been so tough that he can’t buy enough food to feed his family no matter how hard or long he works, and a lot of that is down to the currency.
“I work day and night… but I still can’t provide for my family,” Saeed told The New Humanitarian in his small home in al-Mukalla, the provincial capital of Yemen's southeastern province of Hadramout.
Saeed started working two separate jobs as a driver, which means he leaves the house as soon as prayers finish at dawn and doesn’t come home until around nine at night. Because he still didn’t earn enough to make ends meet, he had to ask his only daughter to have finished secondary school to end her education to save on fees. Then the family began skipping meals. Now they have almost entirely cut rice and fish – a staple in their seaside province – from their diet.
Ten years after the start of Yemen’s civil war, which has caused catastrophic humanitarian conditions in the country, millions of Yemenis like the Saeeds are being driven further into hunger and severe poverty by the swiftly collapsing currency.
In many ways, the economic war – with separate policies and exchange rates – has been as devastating as the one fought with weapons, and the problems, including wild currency fluctuations, began early on.
Less than a year after a Saudi Arabia and United Arab Emirates-backed coalition began their military campaign in March 2015 to support the internationally recognised government against Houthi rebels (officially called Ansar Allah), the exiled president moved Yemen’s central bank to the southern port city of Aden.
One of the most devastating developments for the southern economy came in late 2022, when Houthi rebels attacked oil facilities in the southern provinces of Shabwa and Hadramout in the government-controlled south. The Houthis dominate the capital city of Sana’a as well as parts of central and northern Yemen. These attacks stopped oil shipments from the south, depriving the government of a significant source of cash.
Since then, the Yemeni riyal has fallen from roughly 1,200 against the dollar to around 2,400 in government-run areas, further reducing Yemenis' purchasing power, raising food costs, and forcing people to cut down on meals to live. In Houthi-controlled areas, the riyal has hovered around 537 to the dollar. Recent interventions – like Saudi Arabia’s $300 million infusion of cash into the Aden central bank in December 2024 – have acted only as temporary stopgaps.
The currency problems only compound the everyday stressors in a country where 80% of the population live in poverty, 17.1 million people are estimated to be food insecure, and 55% of children under five suffer from chronic malnutrition.
Money and hunger issues occupy Saeed’s mind continuously. Not only does he have to support his wife and children – three of whom hovered around him while he spoke to The New Humanitarian – but he’s also responsible for two of his sisters, who are unable to work due to health issues.
Most of the time, he said, the family eats bread as a main course. On Fridays when they are expecting guests, he buys fish and rice as a one-off treat. “At night, I’m kept awake by obsessions, thinking about household bills,” he said.
Failed ceasefires and financial interventions
In April 2022, Yemen’s political environment changed dramatically.
President Abd Rabbu Mansour Hadi announced he was transferring power to an eight-man Presidential Leadership Council (PLC), representing some of the major government-allied factions in Yemen. They were tasked with uniting the often-divided allies to combat the Houthis and end the country’s escalating humanitarian crisis.
That same month, the Houthis and the Yemeni government agreed to a UN-brokered ceasefire, paving the way for a large prisoner transfer and rekindling hopes of an end to the conflict.
The establishment of the PLC, the ceasefire, and a timed financial package worth millions of dollars from Saudi Arabia and the UAE had a positive, albeit brief, impact on Yemen's ravaged economy, halting the depreciation of the riyal, which had reached 1,200 against the dollar in government-controlled areas – up from 250 in early 2015.
But the ceasefire officially expired after a two-month extension and peace talks have faltered. While the conflict dramatically decreased even in the absence of a formal truce, the Houthis escalated their attacks on oil facilities late in the year, and the economic war raged on.
In the north, the Houthis prohibited merchants from importing goods from southern ports or buying gas from Marib, the central province that is partly under government control. In 2024, Yemen’s government revoked the licenses of banks that did not shift their offices from Sana’a to Aden, before rescinding the order, citing UN pressure. The Houthis, meanwhile, banned the use of banknotes printed in the south.
“Currency manipulators, from exchange companies to the Houthis, recognise this fragility and are exploiting these weaknesses.”
All the while, the value of the currency has continued to fall in the south, and recent attempts to shore it up have made little to no difference. Saudi Arabia’s promise of $500 million in aid – including its $300 million December deposit – led to only a temporary stabilisation (past injections of money have had a greater impact). In January, Houthi rebels announced they were stopping attacks on most Red Sea ships following the Gaza ceasefire, but again this had no lasting impact on the economy.
Confronted with this rapid depreciation, the Aden central bank ordered private banks and exchange companies in February to shut down and cease trading in hard currency. When they reopened after a short pause, the central bank also banned any online currency trading in an effort to reduce speculation. The Aden central bank has also sold more than $200 million in public auctions since the beginning of this year in an attempt to solve its dollar deficit. Nothing has worked.
Mustafa Nasr, head of the Studies and Economic Media Center, based in the government-controlled city of Taiz, said one of the main factors behind the riyal’s depreciation and the ongoing economic collapse is the lack of optimism about a peace deal that will finally put an end to the long war.
“People don’t have an accurate view of what will happen in the future, if it will be peace or more war,” Nasr told The New Humanitarian. Adding to the government’s woes are dwindling revenues and internal power struggles, he said, explaining that “currency manipulators, from exchange companies to the Houthis, recognise this fragility and are exploiting these weaknesses.”
Waled al-Attas, an associate professor of financial and banking sciences at Hadramout University, said the government “has often misused cash from Saudi Arabia or other donors”, in part because they don’t have expertise on how to best use the money.
Al-Attas believes the public auctions for the dollar have been ineffective. He said the government should focus instead on “raising wages, providing basic services to the people, and implementing pricing monitoring and other accountability mechanisms”.
Public outcry
Last month, Yemenis across the south took to the streets to protest against the rapid devaluation of the riyal, crumbling public services, and shortages of power and cooking gas. Protests in Aden turned violent as people blocked roads and burned car tires to draw attention to their suffering.
Another longstanding issue that al-Attas mentioned – the government’s irregular payment of salaries for public employees – has also fuelled the protests.
Abdul Raham Al-Maqtari, a retired teacher in Taiz, is one of thousands of educators who have been on strike since December, marching through the streets to demand that the government address the deteriorating economic situation and raise their pay.
While al-Maqtari is better off than Saeed and millions of Yemenis because he has four working children who can help – including some who work in the Gulf and send home remittances, an important source of income for many in Yemen – he is still struggling.
He spends most of his 150,000 riyal (approximately $62.50) monthly pension on rent, and has taken on extra work to get by. “Living conditions have deteriorated catastrophically, while the currency has collapsed dramatically,” he said. “This has made salaries insufficient for essential needs.”
In other cities, strikes have pressured the government into minor wage increases, or at least more frequent payments.
Al-Maqtari feels teachers have little option but to strike. “Meager salaries leave some teachers with no choice but to go barefoot or wear tattered shoes: Their appearances reflect their hardship,” he said. “Others are desperate to make ends meet, so they have abandoned teaching or sold their furniture and other belongings.”
Politicians trade blame
As people protest, political parties trade accusations about the crisis, feeding concerns they might resort to violence once again.
In January, the Southern Transitional Council, a powerful component of the PLC that governs Aden and other parts of the south, blamed the riyal's depreciation on the "exiled" Yemeni government that mostly works from outside the country, and demanded its return.
The Aden-based central bank, which has blamed the currency’s depreciation on Houthi attacks on oil facilities, said in February that the Yemeni government had failed to look into “several remedies” the bank had proposed to solve the economic crisis.
Both PLC Chairman Rashad Al-Alimi and Prime Minister Ahmed Awadh bin Mubarak have blamed Houthi attacks on oil terminals and economic warfare for the economic crisis and the riyal's devaluation.
The Yemeni government has also pointed the finger at unlicensed currency exchange companies, accusing them of engaging in currency speculation.
These businesses have become increasingly popular throughout the war, providing cash during times of shortage and filling the hole left by a faltering state and private banks that are split between the Houthis and the Yemeni government. They also provide important services, such as a place to pay for utilities and receive wages.
Subhi Baghafar, a spokesperson for the Moneychangers Association in Aden, denied the Yemeni government's repeated accusations that local money merchants were behind the riyal's devaluation, saying it was driven by a lack of hard currency in the market.
He told The New Humanitarian that Yemenis have been buying gold for years, and moving their money from the riyal to foreign currencies because they don’t trust the riyal. “If the government provides enough hard currency to meet the demand for imports, speculation will cease to be a problem,” Baghafar said.
While the parties trade barbs, the UN and other international organisations have continued to raise the alarm about the urgent need for cash to aid millions of Yemenis. However, the environment for fundraising is rapidly changing given US President Donald Trump’s drastic cuts to USAID, followed closely by the UK’s announcement that it would be cutting foreign aid to increase defense spending.
In January, the UN urged foreign donors to give $2.47 billion this year to cover the aid it coordinates in Yemen. Its plan aims to provide “life-saving assistance to 10.5 million of the most vulnerable” Yemenis. But it accepts that a lot more – 19.5 million, more than half of the population – urgently need some sort of humanitarian aid.
Yemen’s economic prognosis for the coming year is grim, according to local experts and international financial institutions. The World Bank said in January that “without significant clear prospects for peace and security, increased revenues and exports, public finances and external accounts will continue to be under stress.” As it has over the past years, inflation in the south is expected to rise even further.
For Saeed and many other Yemenis, all this means they will be forced to make even more impossible decisions. "During these difficult times,” he said, “my main concern is feeding my children.”
Edited by Annie Slemrod.
